Why Gambling Is Illegal In India

Besides, Las Vegas, New Jersey, Nevada and Atlantic City, gambling used to be an illegal activity almost everywhere across the world. But, this is history. Today, a number of countries, including India, permit their citizens to enjoy the pleasure of gambling (at least some forms of gambling and online gambling) without considering it as an offense. But, often we have heard that gambling is illegal in India? If this is so, how come online casinos and betting platforms, like 22bet and Betwinner are getting highly appreciated in the Indian market? Isn’t there any specific law explicitly stating the legal status of gambling in India?

Indian law prohibits physical gambling, but there are no laws that make online betting illegal activity. However, making sportsbooks is banned in India. It means that if a gambling site is situated in India, it will not be legal for use. To make it more specific, the Public Gambling Act 1867 prohibits any gambling activity in India. Another form of legal gambling in India is the lottery. The Lotteries Regulation Act of 1998 gave each state the right to authorize lotteries if they choose to. There are some rules, including a once-per-week limit for draw games. Horse race betting and lotteries are the only two legal forms of gambling in India.

Although the 21st century has seen a huge demand for online gambling in India, yet most of the beginners still are confused about the age-old debate question – Is Gambling Legal In India?

If this question keeps horrifying you as well, its time to check the actual update or status. So, let’s get started.

A Brief View Of The Indian Gambling Past

Gambling has been existent in India since the time of Mahabharata, where in a dice game, the king Yudhishtira lost his wealth, wife and brothers to Duryodhana (King’s estranged cousin). Since then, gambling and the type of wagers have transformed into more sophisticated casino games, for example, lottery, blackjack, poker, horse race betting, sports betting etc.

Do All The States Have The Same Gambling Laws In India?

No.

Why Is Gambling Illegal

The Seventh Schedule of the Indian Constitution empowers the states to formulate policies and laws related to betting and gambling. Hence, states have the power to formulate gambling laws within their respective states and could even legalize gambling activities, if they wish to do so. The central government is not allowed to intervene in any decisions (regarding gambling) taken by the states.

While Sikkim and Goa have legalized most of the forms of gambling in a regulated environment, there are 13 states that have only legalized lottery.

Public Gambling Act, 1867

According to a report by KPMG, the overall gaming market (majority of which is considered to be unaccounted and illegal) is said to be around US $60 billion or Rs. 2,50,000 crore. This constitutes nearly 3.5% of India’s GDP. Not just this, the proponents of regulated gambling claim that this activity to be a huge revenue source for Goa, Sikkim and Daman. However, despite this, laws in India have been unfavourable for gambling.

Till date, the Public Gambling Act, 1867 (and other pre-independence statutes) is followed in India, which states that operating a gambling house, assisting someone to operate the gambling house, financing gambling, and visiting the gambling house devices a crime. In case of violation, up to three months imprisonment or a penalty fine of maximum 200 rupees is levied.

What’s interesting here is to note that the act does not explicitly states anything about the online gambling websites or online casinos.

Here, one must also note that the Indian law categorizes games into the ‘games of chance’ and ‘games of skill’. The latter has been excluded from any penal provisions of law that ban gambling activities in India. The Supreme Court of India has also legalized playing games of skill as they involve a person’s intellect and skills.

Hence, The Public Gambling Act also legalizes wagering on the games of skill, like Rummy and Horse Racing. For cricket betting, there is no specific law (both for offline or online betting) that prohibits Indians from betting on their favourite sport. However, the federal government does not consider it as a Game of Skill. This presents a state of irony for the players.

ICC’s Chief Executive officer was in favour of sports betting legalization, according to the news published in the Indian National Newspaper. Many online forums and Indian professionals have recommended the government to legalize gambling in India, but in a very regulated environment. According to them, a regulated environment will keep the mafia out of the gambling economy. Coincidently, this recommendation is similar to the last update recorded on the gambling activities in India.

The Law Commission of India, in its latest update on betting in India, has suggested legalising gambling and betting in a regulated environment.

Even the former CEO of ICC (International Cricket Council), Mr. Haroon Lorgat, has urged to legalize cricket betting sites, as a preventive measure against match-fixing and corruption.

Information Technology Act 2000

Known to regulate cyber activities in India, the Information Technology Act 2000, does not mention anything about Betting or Gambling. Therefore, online gambling platforms are out of its coverage.

It is only the state of Maharashtra that considers online gambling and betting as an offense under The Bombay Wager Act.

Is Online Gambling Illegal

Online Gambling

Online gambling is in its early stages of development in the Indian market. Back in 2010, Sikkim tried offering three online gambling licences, but it failed. Currently, the state permits online lottery and allows Indian players from across the country to place bets. Taking a cue from Sikkim, it was expected that a huge online gambling market would be established throughout India. However, no major change has been observed yet.

The major reason behind this is unawareness of the legal status of online gambling in India. As stated above, people do not know if they can play online gambling games without being penalized by law.

Indian casinos are not allowed to create websites that promote sports betting, casino, bingo and other online gambling games. Having said that, it is not illegal for offshore companies, or the non-Indian casino companies to create online gambling sites, meant for Indian players. There is only one rule that is legally binding on them, i.e. offering Rupee (Indian Currency) as a payment method for Indian players.

Hence, it can be implied that Indian players can play online gambling or casino games on websites that are intended for the Indian audience, but are not offered by casino companies of Indian origin. Online gambling is thus, a pure global business.

International Casino And Gambling Sites For Indians

In accordance with the information stated above, there are several Non-Indian websites that allow Indian gaming enthusiasts to explore a range of games in a regulated environment.

The central government does not have the power to make legal decisions over bookmakers (especially the UK licensed bookmakers), operating legally and in a regulated environment under European and International Law.

Betway is a globally popular Malta-based company that offers different types of currencies (including the Indian Rupee) and is available in different languages. International sites are exempted from jurisdiction under Indian laws. They operate under other jurisdictions with a legal gambling license. Also, with no servers, promotions or advertising going on in the country, the authorities are left with nothing than can stop international gambling sites from targeting Indian customers. As a result, it becomes easier for people in India to play their favourite online gambling games, use an e-wallet for payment or bet on horse racing and IPL matches, without violating any law.

Some of the most prominent international gambling sites for Indian players include the following –

• RoyalPanda
  

So, What’s Making Online Gambling Possible In India?

By now, we have clearly understood that involving in online gambling activities (for entertainment of course) is not illegal or banned by any specific Indian Law or Act. If you wish to visit a brick-and-mortar casino and play games without violating laws, you know you have only a handful of choices, like Goa and Sikkim.

However, if you just wanna have some fun with a range of gambling games, you know online gambling sites are the ideal solution.

Here is why online gambling is not illegal in India –

• No Roots In India

As stated earlier, the servers of gambling sites like Betway etc. Are located in countries where betting and gambling is legal. The jurisdiction of Indian laws is restricted to activities that take place within the countries’ geographical limits.

• Virtual Money Payment

The ambiguity of Indian Laws is providing a smooth online gambling experience to Indian players. The online gambling sites once accepted credit and debit cards (issued by the Indian banks) for payment. However, they were prohibited from doing so by the government. Since then, virtual money is used as the desired payment method. Placing a bet online through virtual money is not deemed as illegal.

As far as crypto currencies are concerned, the government declared them to be not legal tender in India. Following this declaration, the use of crypto currency decreased.

• Increasing Popularity Of Online Gambling

Last but not the least, the increasing popularity of online gambling is encouraging more number of investors targeting the Indian audience. Most of the notable investors even pay celebrities to represent their platform. As a result, Indian players get persuaded to bet or play other games on platforms represented by their favourite celebrities.

Take Away

The Indian Laws are highly discretionary and ambiguous in nature, when it comes to online gambling and betting. Hence, online gambling in India is not illegal, unless the Indian government formulates a law explicitly stating about its status.

So, without the fear of getting caught or violating any law, you can enjoy online gambling at any international website intended for Indian players.

Author - Associate Aliza Abdin

This article would deal with the explanation of lucky draw and lottery and solve the most common question-Is lottery legal in India?

What is a Lucky Draw?

A typical kind of lucky draw is a type of game usually played in carnivals where contestants try their luck and pick out a gift from a container without looking. The gifts range from very expensive ones to cheaper smaller ones. It is also known as lucky dip. Nowadays, lucky draws are mostly all about spinning wheels, etc.

Lucky draws also include raffles in which a person buys a cheap raffle ticket and try their luck at winning big prizes like cars, bikes, mobile phones, refrigerators, etc. Raffles and lucky draws are most common in school fetes, carnivals, festivals, etc.

What is a Lottery?

Lottery is a type of gambling in which a person buys a lottery ticket bearing a specific number for a small amount. When all tickets had been sold out a number is drawn at random, for a prize. The prizes usually include big cash prizes for the top three contestants. Many countries have banned lotteries in an attempt to stop gambling and bankruptcy in the poor section of the country; while other countries organize national and state lotteries by following certain rules like licensed vendors to sell lottery tickets and a ban on selling to children. Lotteries were very popular worldwide during the 90s and were a source of income but since the start of the 21st century they have been made illegal in most countries.

There are many kinds of lotteries like single digit or double digit, a 50-50 draw where the lottery organizers give half the amount earned as prize money. The lotteries allow governments to make revenue without generating taxes.

Legal Status of Lotteries in India

So a big question be answered is- is lottery legal in India? Lottery in India is governed by the Lotteries Regulation Act, 1998, according to which the states are allowed to conduct a lottery following 11 conditions. A few years ago, the Supreme Court of India permitted all state governments to ban or allow lottery in India accordingly and refused to make the sale of lottery a fundamental right. This law however does not allow the sale of one digit lottery.

As of 2019 lottery in India doesn’t have all India ban but all states have banned lotteries except for the 13 states that include Kerala, Goa, Maharashtra, Madhya Pradesh, Punjab, West Bengal, Assam, Arunachal Pradesh, Meghalaya, Manipur, Sikkim, Nagaland and Mizoram. Lotteries are very popular in these states and the social activists are continuously trying to raise awareness about how the people are getting addicted to gambling.

But another concept to be added here is the legal online lottery in India. Lotto India is the legal online lottery in India for the players and has jackpots more that the others.

Is the Ban Effective?

As all bans, the bans on lotteries is also not very successful as most trade is carried out underground by illegal means and thus the trade still continues but the government does not get revenues. Some of the lotteries function online that give small prizes for single digit lotteries daily and big prizes for weekly draws. In spite of being banned, lotteries have not disappeared completely and are very popular for earning money illegally. The online version of lotteries does not require the players to disclose their identities and thus they can participate anonymously and avoid getting caught.

Why is Lucky Draw Legal in India whereas Lottery is not?

So to answer this question as to why is lucky draw legal in India recently the NITI Aayog clarified that the Lotteries Regulation Act, 1998 Section 2(b) states that the lucky draws which are conducted to promote digital transactions do not come under the category of lottery and are thus are not banned. The Act defines lottery as ‘a scheme, in whatever form and by whatever name called, for distribution of prizes by lot or chance to those persons participating in the chances of a prize by purchasing tickets’

The Supreme Court permits state governments to ban lottery in India because it is a form of gambling and it makes the poorer section of the society an addict and bankrupt. However this is not the case in lucky draws because the lucky draw scheme which is included in the Lotteries Regulation Act, 1998 has to stay within the given parameters, and most lucky draws which are organized by the governments do not require a ticket purchase and the participants can directly come and try their luck, and thus this does not account to gambling.Online lucky draws require the payment of a small amount which is usually collected by companies like Mastercard or Rupay, or by other banks used for payment and hence the government on their side does not charge anything and offer prizes gratuitously. Therefore it is very clear that a lucky draw is very different from a lottery, and this would not fall under the category of gambling. So this answeres to the question if lottery legal in India.

The Section 2(1)(r) Consumer Protection Act, 1986 also prohibits any kind of unfair trade practice which includes “conducting any lottery or contests whether skill or chance to promote the sale, use or supply of any goods or for the provision of any service.” The NITI Aayog has clarified this too as offering lucky draws to promote digital transactions does not include any service and the customer does not pay anything for getting the reward. These kinds of lucky draws usually include small cash back offers for payment by digital means.

And thus the lucky draw scheme stays out of the ambit of consumer protection laws as well as the Lottery Regulation Act.

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